From Silicon Valley to Beantown, my thoughts on technology, science, the web (2.0), finance, sports, and just about anything else.
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Thursday, July 08, 2010

Strategic Government (Part 1 of 2)

So I wrote a really long blog post about our government, and upon finishing I realized I was better off splitting into two halves. This one will address the structural problems I see today, and the second some potential solutions. These are written for fun - to make myself crystalize thoughts into tangible points and to get feedback to add new elements and ideas to my thinking. Make of them what you will. (Also, apologies for the long gap in the "Healthy Living" series - and, unfortunately, it's going to continue. I will get back to it when work and life allow.)

Today, the prevailing ideology regardless of political party is that the federal government, with its power and resources, is the proper institution to provide for or regulate the basic rights we've defined in our country (everything from food/water to education and health care). This is especially true when the poor are involved - locked in a cycle of poverty and unattractive to private innovation, they would be in a far worse situation than the status quo without government run programs and standards. Any societal problem that arises is solved the same way: a government agency is tasked to fix it.

When we turn to centralized government to solve problems and regulate industries, the quality of service we get is directly dependent on the quality of people in the government - if we have rockstars at every agency, we'll get a great return on our tax dollars and enjoy the efficiencies of scale that central organization provides. However, we have no built-in methodology for assuring this outcome outside of elections, which are indirect and, empirically speaking, largely ineffective.

This approach - creating government solutions to problems - is a tactical and not a strategic one. Today, our government goes from fire to fire, trying to put it out without developing any sort of broader strategy for how to fight fires. This works fine, especially at first - when the passionate and unselfish individuals who created the specific fire-fighting solution are still around (be it an agency or government program) - but eventually the programs grow bloated and, in my opinion, less and less able to handle the problems they're charged to solve.

This seems self-evident - the SEC has no control over Wall St., our public education system is leaving many children behind, the FDA is classifying french fries as vegetables at schools (any wonder we're so fat?), and our offshore drilling oversight has allowed oil rigs to basically have no backup plan. Be it corruption or ineptitude, it's hard to find a government agency that is widely acknowledged to be doing a good job. (I'm sure I'm overlooking stuff here so I'd love to hear some counter examples.)

The status quo has a clear predisposition to failure. As government agents strengthen their ties to industry (formally by past work experience and informally through social networks), corruption naturally becomes institutionalized, for very human reasons: if you're friends with the people that your policies are going make life tougher for, you're going to think twice before making those policies. Throw in the obvious bribes and favors, and it's easy to see why the system is doomed to fail.

The takeaway is that government should be concerned with strategy, not tactics. The approach is not "how do we build the best FDA?", then "how do we build the best SEC?", and so on - it's "how do we build the best regulatory agency?" - a systems engineering viewpoint. How do you create a system in which any industry can be sustainably regulated, be it by an outside agency or laying the groundwork for self-regulation?

This is obviously a very complex question. The intricate web of incentives and the diversity of human nature make any system fallible in a large number of ways. People work for or with the government for a number of reasons: they're passionate about their cause, they want a steady job, they know they can make easy money from bribes and favors, etc. They are motivated by vastly separate goals and desires.

The approach to government needs to take all of this into account. The purpose is to build an overall strategy - we're looking to maximize benefit (progress, justice, effectiveness) and minimize harm (waste, corruption, ineffectiveness). No system is perfect but the point is we need to be thinking about these broader issues and distilling them into sets of rules that can then be applied to each specific iteration of the regulation, utilities, and resource problems.

I'll lay out a very rough groundwork for potential solutions in a subsequent post. Again, the purpose is to get feedback and new perspectives, so feel free to share your thoughts. I've clearly left many important points out - either by choice for brevity or, more likely, by ignorance and poor analysis.

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